Assume you are Claire and are trying to determine if the Mount Hope shopping mall is a good investment of your $6.5 million inheritance, using a 20-year period. Assume operation of the facility begins in year 2 and the equity is utilized in year 1.
- Gross annual revenue
- Annual Maintenance Costs
- Net Annual Revenue
- Estimated Annual Debt Service
- Estimated Annual Profit
- Net Present Value of Claire’s investment, if the discount rate = 9%
- Internal Rate of Return for the project investment
Prepare a memo summarizing your findings from above and make a firm recommendation as to whether the project is a sound investment.